It grates on the management of Nokia (NOK) that they have beaten Motorola (MOT) in the global markets but the the US company still has the lead in share in it own country. By most estimates, Nokia has about 38% of the handset market worldwide. Motorola has 15% on a good day.
Nokia’s CEO told the FT “The only possible ambition for us in the US is to be the market leader. Whatever it takes to be the market leader.”
Nokia has a long way to go. According to research firm Gartner, MOT has a 31% market share in the US. Nokia is fourth at 12%.
But, Nokia has a very big problem in America. To pick up share it will have to have close relationships with Verizon Wireless, AT&T (T), and Sprint (S). But a big part of the Nokia business model is to supply internet content ,such as music, on its own. It has just launched a service which includes free music downloads with its handsets. The US cellular carriers want to deliver content and software to phones on their own because it is such a big profit center.
The irony of the situation is that Motorola needs to have software and content operations as part of its handset division. It needs the extra money to offset falling unit sales. But, it is a more likely ally for US carriers because it does not have the means to compete with them
Winning by losing.
Douglas A. McIntyre
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